Verizon CEO: Linear TV Model Is Dead

Verizon Communications chairman and CEO Lowell McAdam left little doubt about his view on the future of traditional TV. 

Lowell McAdam

Lowell McAdam

“I think the linear model is dead,” McAdam said last week in an interview with Yahoo Finance. “It’s just going to take a long time to die.”

Rather than plowing more investment into that linear TV arena, Verizon will instead place bigger bets on digital, including its own Yahoo properties and a bit on “limited entertainment” content.

Tied to that thinking, Verizon has also dropped a plan to build an over-the-top TV service from scratch, opting instead to forge a partnership with an existing player that is willing to integrate digital content from Oath, the Verizon unit that contains Yahoo and AOL.

Related: Oath Puts Ad Target on Verizon’s FiOS TV Footprint

“Our view is that we should partner with those that are in the linear game,” McAdam said. “Let them be very good at what they do. We’ll add digital content into that mix, and we’ll position ourselves for where we become more of an over-the-top video culture versus the linear model that we have today.”

That’s a major swing, as Verizon previously had its sights on creating an OTT TV service that was not a “me-too” and able to stand apart from a growing array of virtual multichannel video programming distributors.

Under the new plan, Verizon is eyeing a Q4 launch on an OTT service that will blend Oath’s content into the lineup of an existing vMVPD offering. McAdam didn’t identify that partner, but Verizon has ample choices.

Given the competitive mobile services landscape, two seemingly unlikely candidates are AT&T’s DirecTV Now service and the one that T-Mobile is developing following its acquisition of Layer3 TV. Verizon might find a better fit by teaming up with YouTube TV, fuboTV, Sony’s Play-Station Vue, Philo, Sling TV and possibly Hulu, which launched a live TV service about a year ago.